Ecuador is located in western South America, bordering the Pacific Ocean at the Equator, between Colombia and Peru. It's land area is 276,841 sq. km., which is about the size of Colorado, and includes the Galapagos Islands.

The Ecuadorean economy is very dependent on a limited number of commodities including oil, gold, copper, seafood, flowers, coffee, cocoa, and sugar, which represent 90% of Ecuador's exports. It's petroleum resources have accounted for more than half of the country's export earnings and approximately two-fifths of public sector revenues in recent years.

Limited access to international financing forced the government to reduce expenditure levels and cover a budgetary financing gap with loans from international financial institutions, funds from Ecuador’s Social Security Institute, and financing from China.

Coface Country Rating: C -- A very uncertain political and economic outlook and a business environment with many troublesome weaknesses can have a significant impact on corporate payment behavior. Corporate default probability is high.

Coface Business Climate Rating: B-- Evaluating the business environment involves measuring the quality of a country’s private sector governance – in other words businesses’ financial transparency and the effectiveness of the courts in settling debts.

The Ecuadorian economy, is expected to remain in recession. The dollarization of the economy in the early 2000's has helped macroeconomic stability, but falling oil price and the appreciation of the dollar since 2015 have exacerbated the country's fragilities. Oil Export revenues are expected to increase into the next year, but will be limited by OPEC.

Economic Freedom (2017 Index of Economic Freedom): Ecuador’s economic freedom score is 49.3, making its economy the 160th freest in the 2017 Index. Ecuador is ranked 28th out of 32 countries in the South and Central America/ Caribbean region, and its overall score is far below world and regional averages. The government’s policy of continual expansion into economic sectors has considerably undermined economic freedom forcing the private sector to compete with a growing public sector in what has become a restrictive entrepreneurial environment.

Market Access: In 2016, Ecuador embarked on a program of import substitution and voluntary import restraints to reduce its trade deficit. Further suppressing trade, the trade weighted average tariff rate rose to 6 percent. The investment regime is complex and non-transparent. The financial sector remains poorly developed with increased state interference.

Regulatory System: Ecuador's regulatory system is not transparent. Government officials and private Ecuadorian businesses have used regulations and questionable legal maneuvers to affect foreign company operations. Some foreign companies have been required to make additional payments not negotiated in original agreements.

Intellectual Property Rights: There is a widespread local trade in pirated audio and video recordings, computer software, and counterfeit activity regarding brand name apparel in Ecuador. Enforcement against intellectual property infringement, which is the purview of the national police and the customs authority, has been ineffective.

Corruption: The rule of law in Ecuador is undermined by pervasive corruption. Illicit payments for official favors and thefts of public funds are common. Transparency International consistently ranks Ecuador near the bottom among countries it surveys in the region.

Political Violence: Ecuador does not have a tradition of substantial guerrilla activity, nor of frequent violence as a result of demonstrations or political instability. Crime, however, is a serious concern, especially in the larger cities. Violent crime has significantly increased over the last few years, with American citizens being victims of crimes, including homicides, armed assaults, robberies, sexual assaults, and home invasions.

Ecuadorians are more formal in their business dealings than many other cultures. Shake hands when meeting someone, also when leaving.

Professional or academic titles with the surname are used in business. Common titles are "Doctor" (medical doctor or Ph.D.), "Ingeniero" (engineer), "Arquitecto" (architect), and "Abogado" (lawyer). If someone does not have a title, the honorific Señor or Señora is used with the surname. Always wait until invited before moving to a first-name basis.

Business cards are exchanged during the initial introductions. Although most business executives speak English, it is a good idea to have one side of your business card translated into Spanish.

The Ecuadorian culture is reliant on relationships, trust and non-verbal cues. Being distant or protective of personal information can, therefore, be construed as being rude.

Ecuadorians are indirect communicators who speak diplomatically and with courtesy. They view blunt communication as extremely rude.

Ecuadorians are essentially concerned with the people they are doing business with, not the company.

Avoid confrontation and be careful not to embarrass people or publicly place them in awkward positions. Calling attention to someone’s error demonstrates a lack of finesse.

This information is provided by ABC-Amega Inc. Providing international receivable management and debt collection services for exporters to more than 200 countries including Ecuador. For further information, contact [email protected].

This report represents a compilation of information from a wide variety of reputable sources.